How Does A Balance Transfer Work?

Are you paying too much in credit card interest and looking for a money-saving option? If so, then a balance transfer may be the answer for you.

What's a balance transfer?

A balance transfer allows you to take the full or partial balance from one of your credit cards and transfer it a new credit card. Completing a balance transfer makes it easier to pay off old debt because your new credit card could either have a lower APR or a 0% introductory APR for an extended period of time, allowing you to save more money in the long run.

How does a balance transfer work?

Balance transfers may seem pretty complicated, however they are rather simple to complete. The steps below detail all of the necessary actions you need to take in order to complete the transfer.

1. Apply for a new credit card: When you're thinking of completing a balance transfer, you must first find the best card for your circumstance. While you're looking for a credit card, you should be looking for two key features: a lengthy intro APR on balance transfers and little or no balance transfer fee. The longer the intro APR lasts, the more time you'll have the pay off the balance. This means if you have a larger balance, you may want to apply for a card with an 18 month intro APR over a card with only a 12 month intro APR.

Need some help finding the best credit cards for balance transfer? We've detailed some of the best credit cards for balance transfers below.

Chase Slate is the best option for a balance transfer credit card because it offers everything you need to save the most money from the transfer. This card offers a generous 0% intro APR on balance transfers and purchases for 15 months and even has no balance transfer fee if the transfer is completed within the first 60 days of card membership. As if the 0% APR and no balance transfer fee aren't good enough, Chase Slate also has no annual fee. To sweeten the deal, people with merely "good" credit (often considered as low as a 650 credit score) have a chance to be approved for this card as most other balance transfer credit cards require excellent credit for approval.

The Citi Simplicity Card (a NextAdvisor advertiser) is the best card for someone who needs a lot of time to pay off a larger balance because it offers a 0% intro APR on balance transfers and purchases for 18 months. Although you will pay a small balance transfer fee of $5 or 3% of the amount transferred, whichever is larger, with the Citi Simplicity Card, you will never have to pay any late fees, penalty rates or annual fees — ever.

If you're looking for a card with no balance transfer fees, the Barclaycard Ring Mastercard – 1% Back on Balance Transfers is the perfect selection for you. Not only will you pay no balance transfer fees ever, but you'll also earn 1% back in statement credit on the amount of balance transfers completed within the first 60 days of account opening. Yes, you read that correctly — you'll earn rewards for completing a balance transfer! Although this card doesn't offer a 0% intro APR as the two cards above do, it has no balance transfer fee and offers a low 8% variable APR on balance transfers and purchases. The Barclaycard Ring Mastercard also has no annual fee and even allows you to decide the the type of benefits you'll receive from the card.

Want more options? Use our balance transfer calculator to help you figure out which card makes the most sense for your particular situation. You can find the calculator on the right side of this page.

2. Once accepted, initiate the transfer: Once you've been accepted for the credit card of your choice and understand the terms and conditions for your transfer, you need to contact the issuer of the credit card you're transferring the money to in order to initiate the transfer. There are two main ways to request the transfer: calling the bank or requesting a balance transfer online through the bank. Sometimes you can request or initiate a balance transfer before you're even approved for the credit card. For example, Chase Slate allows you to enter all of the balance transfer information on your application form.

The information you'll need to provide your new credit card in order to complete the transfer is the account number for the card you wish to transfer the balance from, the bank name and the amount of money that you wish to transfer to the new card. They will need an exact dollar amount so you should check your statement or call the bank to get the most up-to-date balance.

3. Verify the transfer is complete: It's important for you to continue paying at least the minimum payments on your old credit card until you receive the statement reflecting the balance transfer because if you don't, you might be missing a payment, which could negatively impact your credit scores. Balance transfers usually take about 7 days to complete. Once you have received the statement, the balance transfer is complete and you can focus on paying the new credit card, unless you still have a balance on the previous card.

It's important to note that you should not close the original card once the balance transfer is complete because it could negatively affect your credit. Learn more about this and the other four credit card mistakes you should avoid here.

Disclaimer: This content is not provided or commissioned by the credit card issuer. Opinions expressed here are author's alone, not those of the credit card issuer, and have not been reviewed, approved or otherwise endorsed by the credit card issuer. This content was accurate at the time of this post, but card terms and conditions may change at any time. This site may be compensated through the credit card issuer Affiliate Program.

I have an even better way of not paying credit card interest. I pay off my balance every m0nth.

RmMarch 20, 2015

I have heard that if you have two cards from one CC company, if you transfer a balance from one card to a new card from a different company, the first issuer might raise your rate or lower or even cancel your of credit on the remaining card.

Anyone else hear this?

Robert GuttmanMarch 18, 2015

My brother-in-law used to do this. It did not get him out of credit card debt. All it did was transfer the debt to a different credit card. There is only one way to get out of credit card debt: pay it off.

The real problem is that banks and credit card companies make it far too easy for people to get themselves into debt. In addition, people today do not seem to understand how compound interest works. I don't think they teach them anything about that in school anymore. As a result, a lot of people people seem to have the mistaken idea that a credit card is "plastic money", and that they can simply buy anything they want with it without ever having to pay for it. Not only that, but they then seem genuinely surprised when they find out that the $1000 worth of stuff they bought is suddenly going to cost them $5000.

EdMarch 10, 2015

I was offered a credit card yesterday. zero APR on balance xfers for 15 months. But after that rate could be in high 20's or higher if prime rate climbs. works great if I can pay off balance in 15 months. But if not, I'm in worse shape than today.

KenFebruary 26, 2015

February 25th, 2015.
I think the biggest threat to one's financial portfolio aside from credit card debt is healthcare. Sooner or later, you will get sick even become terminal ill. Those who
have healthcare in-place is this nation will keep their assets and continue to pay-out
the annual premiums and deductibles to counter the huge medical bills that can
deplete even bankrupt your life. Non-credit card debt is an easy focused approach
to self-control and discipline. Just live below your means and handle money as a steward for God, which he's entrusted you with managing your life as well as your finances. Do not buy on credit, but always save for it and pay cash. Always take responsiblity for your actions and repay whatever you've borrowed promptly. Your name is your bond. Your promise to repay with interest is you're integrity. And your
stewardship in handling your finances is your moral charactor.

RodDecember 19, 2014

Michael rogers, please introduce me to your wife.

I want to date her.

I figure, if you'll put up with this, you'll put up with raising a child that isn't yours.

LindieDecember 7, 2014

i had a card seems like 30 years ago now from Mellon Bank.
they solicited me. The deal was if I paid it off and was in good standing and was never late they would refund all the interest they charged me along the way.
believe it or not when the time came they actually kept their word.
when I took my money I made it last me the whole year that I was unemployed. lifesaver
I don't have any debt right now but I really don't need anything either!

JJBabyNovember 21, 2014

It's clear both of you have a problem. You need to ask her why is it she needs to spend money you all don't have to impress people who don't know her and don't care. She's not happy somewhere and the only way she thinks she's finding happiness is by impressing people who don't give two rat's patoot's about her. True friends and family don't need to be impressed by the things you have. And you, stand up and be a responsible husband and cut the cards up yourself. There's no reason why your house should ever be a ATM for something stupid like her selfish addiction to stuff that's out of style in a season. A man who owes someone a penny is another man's slave.

Charles MNovember 15, 2014

Mike, You are NOT responsible for her debt regardless of State of Nevada being a community property state. Her original application for a credit card did not have your signature. That applies even if you later have the same card given to you. You only have to write your objection to the card issuer, the debt collector, and credit reporting agency with this:

I was NOT an original signer on the credit card application, and want verification of the original signature(s).

Charles MNovember 15, 2014

Mike, You are NOT responsible for her debt regardless of State of Nevada being a community property state. Her original application for a credit card did not have your signature. That applies even if you later have the same card given to you. You only have to write your objection to the card issuer, the debt collector, and credit reporting agency with this:

I was not an original signer on the credit card application, and verification of the original signature(s).

Lisa RiouxOctober 15, 2014

Your article is filled with well-thought out, informative details about credit cards – disavantages and advantages of transferring your balances. Kudos for a great article. Thanks for reminding your readers that it is not a good idea to close older accounts. This move could adversely affect their credit score.

Edward mirandaOctober 14, 2014

My wife and I are business owners of Life leadership. Life changing information that includes financial fitness to help people get out of debt. Let me know if you are interested.

JohnOctober 9, 2014

Okay lets say I transfer my balance to a card with a non interest rate period for 12 months. What happens after that period if I have a balance of lets say $5? Do they automatically add the interest that I was supposed to be charged during the free period? In other words, would they add the interest worth 12 months to the balance just because the remaining balance was not paid in full?

temple run online mobileOctober 5, 2014

Magnificebt beat ! I would like to apprentice while you ammend your site, how can i subscribe for a blog site?
The account helped mme a acceptable deal. I had
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taSeptember 28, 2014

Just buy the book, Kill Your Cards. You can eliminate all your cc debt in 120 days. Your debt is only worth 3 cents on the dollar.

DianneSeptember 15, 2014

This transfer shtick trick is based on one principle and one principle only….KEEP YOU IN DEBT. Credit card companies are committed to keeping you in debt and hopefully making minimum payments for the rest of your life. They are not designed to help you but to make them insane profit. Transfer to another card and now you have TWO cards to max out. Which is what they know you will do when the next emergency pops up. Low wages keep you from saving and credit cards become a way of life and keep you shackled. WAKE UP. I cut them up 16 years ago, today have no debt. I don't do unsecured debt ever for anything. The way it used to be. I get by quite nicely.

Mary…that is correct information if you receive 0% interest for a purchase at a store at like Lowes or Best Buy. If you hit the 19th month and you still have a balance then they tack on the full interest for that purchase. However, if you receive an offer in the mail for Visa or MC and transfer a balance from another card, when the end of the period is up it really is 0% for that 18 months (or whatever the term is) the only thing that changes is the APR. When applying you need to make sure you read the terms of the card. Mine typically say 0% for lets say 15 months with a 3% balance transfer fee (no transfer fee cards are long gone). I have done this several times, taking my credit card debt from $14,000 to $2800 way more quickly than having a full interest credit card. Visa always approves for way more than MC…and when I am done with a card I keep the cards open and put the card away in a place that I won't use them, but have them in case of an emergency. Paying monthly and on time on revolving debt is the fastest way to build up credit if you have none, or to improve a poor credit score.

ptSeptember 3, 2014

Mary… not that you'll ever come back and follow up, but it appears you didn't pay off the balance in time for the "free" balance transfer to be really free. 1) I haven't heard if a term longer than 18 to 24 months. Most are 12 or 15. 2)If you make new purchases on top of a balance transfer you must pay those off first and can be charged interest on them even before the introductory period is up. 3) CALL your bank and ask what the fee is for and how to get out of it quickly as possible but don't overextend yourself again.

Marco DewacoAugust 30, 2014

I guess what we really have to engrave deep in between our ears is the old wisdom:

Live within our means.

LowelAugust 26, 2014

This article is just a come-on for selling credit cards and it sure doesn't tell you the things you must do if you want to save money by transferring balances to a card with low INTRODUCTORY rates.

Here are 3 simple rules to make it pay — for you, not the bank:
1. Never transfer more than you can pay back within that Introductory period — otherwise the interest rate will jump sky high when it ends. (Remember to add that "fee" you're charged up front to the balance you'll be carrying.)
2. Always make more than the minimum payment. Pay enough monthly to bring that balance down to zero before you get caught when the Introductory period ends.
3. Never ever use the card for anything else. Never. Ever. You're adding debt that is NOT subject to the low Introductory rate and the bank applies your payments to the low interest balance first — so you're stuck with the high interest balance until you've repaid the initial balance transfer amount.

If you're disciplined enough to follow these rules, then go for it. If not, don't do it.

maryAugust 24, 2014

I completed a balance transfer from one card to another about 2 years ago with a 3% fee.
I noticed on my statements that I am still paying a balance transfer fee two years later. Did I miss something in the small print ?

LILLYAugust 19, 2014

Michael Rogers: Stand up and be a man and Grow a pair, If you cant control your wife and don't like the life, cut your loses and leave, they're are other pieces of tail out there. Some of us have brains, morals and consideration for others. You continue to live that way you deserve what you get. So Take Responsibility!

Sh'xangAugust 18, 2014

Had a $2000 credit line. Made sure balance never went below $1000. Took advantage of the 18months 0% Apr. Paid balance down to $100. Transfer that to a new card w/ 18 months 0% Apr. Hid the old credit card in a place that I would have to open many boxes to get to. :) And, I always pay way more than the minimum. This isn't how I used to be though. I have maxed out 3 credit cards w/ $15,000 total balance more than 7 years ago. No more!!!

JeniWAugust 15, 2014

There must be a catch, or a "but," or "exceptions." That is not mentioned in the article. I would not try doing this without full disclosure of the "catch" is.

ADEYINKAAugust 14, 2014

My credit is bad, can I still transfer my credit card balance?.

rich vinetAugust 10, 2014

One downside of balance transfers is that the lower rate for the transferred balance is paid off first. This means that purchases made on the card after the balance transfer accrue interest at the normal rate for the entire time that the glance transfer debt is being retired. The best bet therefore is not to use the card for anything until the balance transfer amount is fully paid off.

Steve FranklinAugust 3, 2014

Have been following Dave Ramsey's advise and have managed to eliminate three credit card balances to date. Was skeptical at first but it does work. Even managed to save $1200.00 for emergencies. My wife and I will be debt free in December 2015. And yes, cut your cards up. Cash truly is the better way to live.

MemoAugust 1, 2014

Love how everyone can tell someone else what to do with their spouse. Regardless of your family structure DON'T BUY-what you can't PAY FOR. Debt will ruin you. Stop chasing the uncatchable lifestyles of others and live within your means. Shifting debt from one card to another is just denial.

Lee EllakJuly 31, 2014

Get a rewards back card and pay in full every month. I like the monthly cash credit back with Capital One Visa. For me, points cards are a waste. Just rebate my card with 1.5% rebate minimum on anything I charge.

CreditSmartJuly 30, 2014

The best way to create good credit and maintain it is to pay your full amount every month.

SharonJuly 30, 2014

I have a credit card debt of approximately $7,000. I wanted to transfer the balance to a O% APR, no transfer fee and no interest for 15 months. Well I tried TWO different credit card companies that claim offer the O% APR, no balance transfer fee and O% interest for at least 15 months. That's ok but the problem is they will only give me a line of credit , one card, 1800.00 and the other $2,000. Unless I do more than one card, which I refuse to do, I can't get ahead.
Very frustrating.

bbJuly 23, 2014

Well said Paul.

KalenaJuly 22, 2014

What's the deal with calling this a "little known secret"???? It's the oldest trick in the book! Just to grab the reader's attention. I hate that.

NancyJuly 22, 2014

This article is just "robbing Peter to pay Paul."

I got out of debt ( over $20,000) by 1) selling my car which removed the insurance, gas, and maintenance; 2) moving in with a relative who asked for a low rent (which can also be achieved by moving to a lower-rent property); 3) purchasing only necessities for nine months. I also spent almost a year looking for a new job—and found a better-paying one.

So, a lot of self-discipline and a little luck got me put of debt.

JosephJuly 19, 2014

Move to Florida. Florida law states that spouses are not responsible for each others debt unless your name is on the account with her

DaveJuly 19, 2014

Another huge problem is that you now have a credit card with a zero balance and the temptation to use it is there. You should cancel the old card immediately even though it may lower your credit score. Otherwise, the balance transfer will be pointless if you continuously increase your debt.

C al HarwickJuly 16, 2014

No matter how one looks at.IF YOU OWE MONEY ITS STILL A DEBT.

MaxineJuly 13, 2014

When you transfer a balance from one card to another. Can you still use the
old card? Will that make the balance for the old card zero?

Brandon SaxtonJuly 2, 2014

Another big piece of the puzzle here is you better have that balance paid off at the end of intro period or they charge back interest and usually have a higher rate after the intro. I tell my clients that this tactic can work, and I have done it my self, but be sure to get it paid down by end of period. I recommend 1 month early to avoid any confusion with the company.

Steve GibsonJuly 1, 2014

Divorce her, declare bankruptcy, move on with your life.

Lamar FarmerJune 24, 2014

There is only one good way to eliminate credit card interest. NEVER CREATE IT. You are crazy if you do.

Becki KellyJune 22, 2014

I would hire an attorney to see what your options are. I know men who get out of the marriage by cutting their losses at the time to prevent from future debt. With a credit card/shopping addiction, it won't go away without intervention. I don't think this is a fair system because in the end, we all pay for those that don't or can't.

doris paricoJune 21, 2014

If I were you I would make her either go get a job to pay it herself OR have her cut up the credit cards! My husband has never paid my credit card bills. I work and I pay my own. We pay off the,balance every month. We agree not to charge anything that can't be paid for when the bill comes due! Good luck!

Michael rogersJune 15, 2014

While the balance transfer trick is a useful tool it can be devastating for credit card junkies such as my wife. My entire life with my wife of 40 years have been spent chasing her credit card debt. 15 years ago she had accumulated over 75,000 dollars in debt with only a 30,000 a year job she kept a perfect credit rating with the beauty of balance transfers. We had to mortgage out home to get her out of that jam. She currently has almost 40,000 dollars in credit card debt and has not had a job in 5 1/2 years, again the beauty of balance transfers. She has over 100,000 dollars of unsecured debt available to her and there is nothing I can do about it. To top it off the state of Nevada says that I am equally responsible for her debt even I have no control over it's accumulation.

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About Author

Julie Myhre

Julie is the Senior Manager of Content at NextAdvisor.com and has more than four years of professional writing experience. Since the beginning of her career, Julie's writing has been published by numerous nationally-recognized news websites, including USA Today, Business Insider, Wired Insights and American City Business Journals, among others. She is an alumna of San Jose State University and currently resides in the San Francisco Bay Area. Follow her on Twitter @JulieAdvisor.

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